The Egyptian Exchange (EGX) saw ups and downs last week, where separate movements of some stocks made the difference. The Commercial International Bank (CIB) played the main role recently, in the absence of regular incentives, in pushing the EGX upward.
The benchmark index EGX30 decreased by 0.69%, closing at 13,728 points. The small and medium-sized enterprises index EGX70 also declined by 0.34% to settle at 534 points. The broader index EGX100 fell 0.56% to 1,383 points, while the EGX30 capped closed at 15,772 points, down 1.3%.
Mohamed Hassan, managing director of MEDAF for asset management, expected that the market would continue its sideways movement until liquidity breaks the resistance level at 14,000-14,100 points.
Last week witnessed some rise in the market, where EGX30 approached the resistance level of 14,000 points, leading to a profit-taking wave in the midweek sessions. Therefore, the index declined to 13,600 points and closed the week at 13,728 points, he added.
Hassan stressed the need to reconsider the capital gains and stamp duty on EGX to help the market overcome the negative performance. The market was also impacted by low liquidity after imposing the last segment of the stamp duty at a rate of 1.5 per thousand on all transactions, which deepened the market cap losses of listed companies to over EGP 320bn in three years. He called for cancelling the stamp duty on the EGX transactions to boost liquidity.
Mohamed Kamal, head of Corporates Department at Al-Rowad Securities Brokerage, said the market is still moving sideways between 13,650-14,000 points, predicting that EGX30 would breach the 13,700 level on Sunday.
The positive market movement in the past week was supported by the banking sector, led by the CIB, which was the main reason for the market to rebound to near the resistance level of 14,000 points.
He noted that the market desperately needs positive news, such as cancelling stamp duty on transactions or pursuing the government IPO programme, to end the recession in the market.
Kamal pointed out that the EGX70 would maintain the sideways-to-declining trend at 525-540 points.
He advised investors to avoid margin trading and focus on stocks with good performance.
The market capital last week was EGP 697.3bn, down 0.63% from EGP 700.7bn in the week before last. Shares accounted for 23.9% of the total trading value, while bonds seized 76.07%.
The total value of trading on EGX reached EGP 10.4bn last week, executed through 84,000 transactions over 767m securities, compared to EGP 12.6bn trading value executed through 100,000 transactions on 1.059m securities in the week before last.
Egyptians accounted for 65.4% of trading on the stock market, while foreigners had 23.1% and Arabs 11.5% after excluding deals.
Foreigners recorded net purchases of EGP 47.5m in the last week’s transactions, while Arabs registered net sales of EGP 85.1m after excluding deals.
Egyptians represented 65.3% of trading on listed shares since the beginning of the year after excluding deals, while foreigners had 24.8% and Arabs 9.8%.
Foreigners were net sellers at EGP 114m, while Arabs recorded net sales of EGP 236.1m since the beginning of the year.